Welcome to the blog of Dr. Lisa Burns' Media Studies senior capstone class (Section A) at Quinnipiac University. If you're looking for the latest on media industry trends and insightful media analysis, you've come to the right place.
Tuesday, March 21, 2017
Music Blog 6, Question 1 (March 28th)
Which streaming service has the most
sustainable business model? And which one do you think is struggling? Limit:
8 responses
Streaming music is a major way that people listen to music. In 2016, “streaming overtook physical sales and became a dominant driver of revenues in the music industry” (Gensler). This helped grow the music increase, bringing in $1.61 billion. This has led to new platforms evolving, vying to get subscribers to stream through their platform. Pandora, iHeartRadio and Amazon all debuted on-demand streaming services in 2016 similar to the platform that Spotify has perfected. Out of all the streaming services, I think that Apple Music and Spotify have the most sustainable business model. I personally use Spotify but after reading the articles, Apple Music has made headway in the streaming industry. After launching in 2016, they so far have 20 million subscribers and are growing. They have a lot of opportunity to continue to grow and with the Apple brand behind them to attracts people instantly. A lot of people looked at iTunes when it first came out (and still do) as the go to place to get music. They always have exclusive deals and promotion you can only get on iTunes and they are doing the same thing with Apple Music. Chance the Rapper’s album was put out exclusively on Apple Music, which attracts people to use the service or even switch over to it. Spotify has been the largest player in the music streaming world, they have over 50 million paid subscribers and offer different levels of service depending on the subscribers budget and lifestyle. Unlike Apple Music, they don’t have exclusive deals with artist, which can be both a good and bad thing. According to Troy Carter, global head of creator services for Spotify and CEO of Atom Factory says that “limiting access to music only incentives fans to seek it out on pirate sites or YouTube where it generates less revenue” (Levine). For services like Apple Music and Tidal, exclusive deals do not always work in their favor.
Tidal is the streaming service that seems to really be struggling to compete with top brands. Recently, Jay Z sold one-third stake in Tidal to Sprint. Tidal offers exclusive content to subscribers from artist like Rhianna, Beyoncé and Kayne West and is in most cases the only way to access this music without pirating. According to an article by the Boston Globe, Midia Research estimated that Tidal had only 1 million paying user, significantly lower than Spotify and Apple Music. Tidal deal with Sprint will hopefully give them a big boost to access more subscribers. I have not used Tidal but it seems to have specific audience that they reach out to and don’t have all that Spotify and Apple Music have to offer. Amazon Music, Pandora and iHeartRadio are those in-between services that could really either succeed or fail. Amazon and Pandora have a huge fan base that will help them succeed. Pandora was the go to service because it offered custom radio, now they offer an on-demand service like Spotify so it will be interesting to see where this take the company. Mills, Doug. “Tidal, Jay Z’s Streaming Service, Sells a Stake to Spring-The Boston Globe.” BostonGlobe.com. N.p., 23 Jan. 2017. Web. 23 Mar. 2017. Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. N.p., 3 Mar. 2017. Web. 23 Mar 2017. Levine, Robert. “Bad for the Industry: Spotify’s Artist Whisperer Troy Carter Slams Exclusives, Updates Company’s Subscriber Total.” Billboard. N.p., 25 Aug. 2017. Web. 23 Mar. 2017.
Last year, “2016 became the first time streaming overtook sales as the music industry’s dominant model and subscriber growth overall has consistently increased during the past few years” (Rys, 2017). The two dominant streaming services are Spotify and Apple Music, Spofity with 40 million subscribers and Apple Music with 20 million. Currently, “several analysts agree that the streaming landscape in 2017 will be dominated by Spotify and its long-rumored IPO” (Rys, 2017). It’s not surprising that Spotify is the most sustainable and successful streaming service because it is the most popular among subscribers. Spotify created the original on-demand system of streaming music, and more often than not, such as with Netflix, the original streaming service is most successful. However, “it should be noted that Spotify has yet to turn a profit, having lost nearly $200 million on $2.2 billion revenue in 2015 and the company’s $1 billion round of convertible debt, raised in March 2016, will require hefty interest payments the longer the company stays private” (Gensler, 2017). According to the article Bad for the Industry, Spotify is planning to go public in the second half of 2017 and is adding subscribers faster than ever, so the company need not worry too much about its profits (Levine, 2016). Spotify is currently the number 1 streaming service for music as it “increasingly exposes users to new music, provides marketing for artists and helps sell concert tickets” (Levine, 2016); it’s more than just a streaming service. Also lucky for Spotify, because it is so popular, many artists support this new way of streaming music and were ecstatic when the streaming service reached 50 million paying subscribers. Music artists such as Justin Timberlake, Demi Lovato, and more took to Twitter to congratulate Spotify; celebrities endorsing the streaming service without being “forced” to is another factor that makes Spotify so popular among listeners. People tend to gravitate toward things celebrities like.
Streaming services that are struggling are the smaller companies such as Tidal and Soundcloud because there are so many music-streaming options right now. “Along with established offerings like Spotify, Apple Music, and Google Play, not to mention Youtube, there will soon be nearly a dozen on-demand music streaming services in the United States alone” (Rys, 2017). Due to the fact there are so many options and most listeners “will never subscribe to more than one streaming service” (Levine, 2016), the smaller companies will most likely fall under consolidation, unless they can offer “more, or different, value than the market leaders already have” (Rys, 2017). When it comes to offering more for a cheaper price I think Pandora could end up giving Spotify a run for its money. “Pandora has already negotiated deals with labels to offer enhanced radio at $4.99 that includes offline listening and replay functions” (Rys, 2017), while it is also coming out with a Premium option “with access to 40-million songs on-demand plus offline listening and curated playlists from the company’s editorial team” (Billboard). Pandora is already a very popular radio app with tens of millions of subscribers, so by creating a Premium option that is very similar to Spotify the streaming system only becomes more marketable. “With Premium, Pandora is leveraging their immense trove of data and everything they’ve learned about personalization to offer a listening experience that sets a new standard for what a music service should be” (Billboard).
Works Cited
Billboard Staff. “Enter Pandora – New On-Demand Streaming Service Launches This Week.” Billboard. N.p., 13 Mar. 2017. Web. 26 Mar. 2017.
Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. N.p., 3 Mar. 2017. Web. 26 Mar 2017.
Levine, Robert. “Bad for the Industry: Spotify’s Artist Whisperer Troy Carter Slams Exclusives, Updates Company’s Subscriber Total.” Billboard. N.p., 25 Aug. 2017. Web. 26 Mar. 2017.
Rys, Dan. “2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. N.p., 6 Jan. 2017. Web. 26 Mar. 2017.
It should come as no surprise as to which streaming services have the most sustainable business models. Numbers don’t lie and it shows because Spotify and Apple Music rightfully boast of having 40 million and 20 million paid subscribers (Rys). It is interesting to note, however, that the two streaming services go about their business models in two different ways. According to cnet.com, Spotify is the only service that allows the user to stream free, on-demand tunes with advertising (Solsman). This draws the attention of users, much like myself, who continually refuse to pay for music and will sit through an ad to do so. Apple Music plays a much different game and utilizes exclusive deals with top name artists to draw those users in who need to listen to an album immediately upon its release. Some of the big name artists include, “Drake, Future, Frank Ocean, DJ Khaled and Travis Scott” (Halperin). There has been worry since Spotify has yet to turn a profit, having lost nearly $200 million on $2.2 billion in revenue in 2015 (Gensler). I do not think there should be any worry seeing as the now very profitable Netflix did not turn a profit before its IPO in 2002, I can see Spotify easily following suit once they go public, which is speculated to be around September (Rys).
The music streaming service that I believe is struggling the most at the moment is SoundCloud. It’s a shame to because they have a user base of around 175 million listeners, however, the company lost around 52 million in 2015 with no sight of turning a profit (Liptak). SoundCloud is a niche music service, many users upload and mix their own content, something that you do not see on the larger services like Spotify and Apple Music. SoundCloud does offer a premium service with the price tag of $10 to upgrade to SoundCloud Go+, which includes access to over 150M tracks, no ads and offline listening, but these few perks do not seem very enticing when Spotify and Apple Music have a much larger libraries of popular artists with an overall better streaming experience for only $5 a month in Spotify’s case. Works Cited Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017. Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 27 Mar. 2017. Joan E. Solsman September 9, 2016 5:00 AM PDT. "Apple Music vs. Spotify: Guess Who's Winning Now." CNET. N.p., 09 Sept. 2016. Web. 27 Mar. 2017. Liptak, Andrew. "SoundCloud Is Losing a Lot of Money - Is an Acquisition Coming Soon?" The Verge. The Verge, 08 Jan. 2017. Web. 27 Mar. 2017. "Purchase a Consumer Subscription." SoundCloud. N.p., n.d. Web. 27 Mar. 2017. Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Recently there has been a surge in the popularity of music streaming. Streaming services like Spotify, Pandora, Apple Music, and Amazon were the major game changers in the industry. The streaming service that has the most sustainable business model would have to be Spotify. “Spotify, the world’s largest music subscription service, today announced a major milestone: 50 million paid subscribers,” making them the top subscribed streaming service (Gensler). Clearly, whatever they are doing is working out in their favor. Their subscribership is rapidly growing. “Streaming subscriber growth has also consistently increased over the past few years: in 2016; Spotify and Apple Music together added more than 20 million subscribers, boosting their announced numbers to 40 million and 20 million, respectively,” growth like this was amazing to see and truly proves that Spotify, with over 40 million subscribers, is a force to be reckoned with (Gensler). “I don’t know if catching Spotify needs to be the goal, but I think making Apple music stronger is,” according to one of the managing partners at Music Watch (Rys). Other streaming services are trying to mimic Spotify’s business model since it has proven to be a success. “It (Spotify) increasingly exposes users to new music, provides marketing for artists and helps sell concert tickets” (Levine). Spotify is not only helping its users create custom playlists, but they are also helping the artists get their name out there and promote their upcoming tours.
(Sicbaldi Continued) One streaming service, on the other hand, is struggling. In my opinion Pandora is that one. Pandora, in my opinion, has frequently been two steps behind when it comes to being a competitive streaming service. Pandora just introduced Pandora Premium which “will cost $9.99 a month, with access to 40 million songs on-demand plus offline listening and curated playlists from the company’s editorial team” (Staff). Similarly to the already successful Spotify version, Pandora Premium will be an ad free music platform. “Premium will be a mostly mobile-only service at first, with other platforms- including the desktop—rolling out in the coming months,” Pandora is already behind when it comes to premium content, and not being available on the desktop is only going to push them further behind (Staff). Their free version is so full of advertisements and commercials that at times you feel like you are hearing a lot more commercials than music. If Pandora wants to compete with the big names like Apple Music and Spotify, then they need to step up their business model and start doing services similar to Spotify since what they are doing is clearly not competitive enough to be a top competitor. Works Cited Gensle, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. Billboard, 2 Mar. 2017. Web. 27 Mar. 2017 Levine, Robert. "'Bad for the Industry': Spotify's Artist Whisperer Troy Carter Slams Exclusives, Updates Company's Subscriber Total." Billboard. Billboard, 25 Aug. 2016. Web. 27 Mar. 2017. Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. Billboard, 6 Jan. 2017. Web. 27 Mar. 2017. Staff. "Enter Pandora: New On-Demand Streaming Service Launches This Week." Billboard. Billboard, 13 Mar. 2017. Web. 27 Mar. 2017.
Most people are aware that streaming services are slowly taking over the music industry. 2016 became the first year in which streaming overtook sales as the music industry’s dominant platform. 51.3 percent of album consumption and downloads came from streaming services. In 2016, Spotify and Apple Music together both added more than 20 million subscribers and boosted their subscriber numbers to 40 million and 20 million, respectively. With the success of Spotify and Apple Music, this prompted other media companies to start their own streaming services, such as Pandora, IHeartRadio, and Amazon. In order to compete with Spotify and Apple Music, the streaming leaders, companies will have to think outside of the box and be able to offer more additional services in which Spotify and Apple Music do not. Surviving in the streaming industry may be hard to achieve but creating a company in which can be bought out, may be the goal for some streaming services. There are already rumors of Google Play and other companies bidding for SoundCloud and Tidal, and other streaming services. The most sustainable business model will come down to a battle between Spotify and Apple Music. In 18 months since Apple Music was launched, they surpassed the 20 million subscribers mark. The months between September and December of 2016, there was a 15 percent jump in subscribers. 50 percent of Apple Music users live outside of the United States, which is good for the future of the media giant because they aren’t relying on strictly U.S. sales. Apple Music has been targeting the hip-hop genre specifically because they have noticed that the genre has been underrepresented on Apple Music. Targeting the hip-hop genre will also help in reaching the 18-24 demographic. Most people I know use Spotify, but if Apple Music starts to take hip-hop artists exclusively away from Spotify, then they might have a slight advantage in the future. A few weeks ago, Spotify announced that they reached the 50 million paid subscribers mark. In September, Spotify was at 40 million subscribers, so that means in just five-and-a-half months, Spotify gained 10 million subscribers. Spotify’s numbers will continue to grow and the streaming giant leads the industry, and it is also possible that Spotify can go public with their IPO and generate more and more revenue. Spotify used to allow all music available to paying and non-paying customers but that will soon change. Spotify has agreed with multiple major record labels to restrict some of the biggest new releases to their premium members only. This can either hurt their future or add more subscribers, which I think is the more likely option. Spotify is currently the streaming leader in the industry and I don’t see that changing any time soon, I have been paying for Spotify for a few years now and I recently have tried Apple Music and cannot see myself making the change over.
Works Cited:
Rys, Dan. “2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 27 Mar. 2017.
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017.
Hern, Alex. "Spotify to restrict some music to paying subscribers only." The Guardian. Guardian News and Media, 17 Mar. 2017. Web. 27 Mar. 2017.
Last year, in 2016, “streaming overtook physical sales and became a dominant driver of revenues in the music industry” (Gensler). The popularity of streaming music is growing each day, and so are the choices of outlets we can go to listen. Amongst them all, the two most dominant is Apple Music and Spotify, with both streaming services growing consistently. In 2016, both Apple Music and Spotify added, “more than 20 million subscribers, boosting their announced numbers to 40 millions and 20 million.” (Rys) Personally, I use Spotify for their free service. I grind out and endure the 30 second adds to listen to Ed Sheeran free of cost. I feel that many people, even if they don’t like to admit it, also scheme this service for their escape debt free. Out of them both, I would say that Spotify has the most sustainable model, and several analysts agree with me stating that, “the streaming landscape in 2017 will be dominated by Spotify and its long-rumored IPO.” (Rys) Spotify is currently in debt. A lot of Debt. However, this does not worry the streaming giants because, as mentioned, they plan to go public in the second half of 2017, which will quickly turn a profit with their already established services. (Levine). A streaming service that I would consider struggle would be SoundCloud. As with the popularity of streaming, more and more services are being created.
Considering that listeners “will never subscribe to more than one streaming service (Levine), and with Apple Music and Spotify sharing roughly 60 million subscribers, it is going to be difficult for anyone else to share the success. In the article, Streaming Wars, Rys adds that companies smaller than Apple Music and Spotify must provide “more, or different, value than the market leaders already have.” (Rys) Unfortunately, the only added value that SoundCloud provides is the price, currently charging $9.99. As a company competing for subscribers, it is hard to fathom why SoundCloud would price their service so high. Later in 2017, and 2018, I believe that you will see less streaming services. With streaming music so popular right now, many new services are coming to the surface, however there is a question how sustainable they are, and how long they will last. I believe that many companies will either go out of business or some of the big boys like Apple Music, Spotify and Pandora may decide to eat them up and acquire.
Cited. Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. N.p., 3 Mar. 2017. Web. 22 Mar 2017. "How Music Marketing Is Changing In 2017." Hypebot. N.p., 2017. Web. 27 Mar. 2017. Levine, Robert. “Bad for the Industry: Spotify’s Artist Whisperer Troy Carter Slams Exclusives, Updates Company’s Subscriber Total. “Billboard. N.p., 25 Aug 2017. Web 23 Mar. 2017. Rys, Dan. “2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?” Billboard. N.p., 6 Jan 2017. Web. 27 Mar. 2017.
We all know that streaming music is the future of the industry, and according to Nielsen, “In a year full of milestones, 2016 became the first time ¬streaming overtook sales as the music industry's dominant model, accounting for 51.3 percent of album consumption and besting physical and downloads combined” (Rys). Additionally, “subscriber growth overall has consistently increased ¬during the past few years; in 2016, Spotify and Apple Music together added more than 20 million ¬subscribers, -boosting their ¬numbers to 40 ¬million and 20 ¬million, respectively (Rys). But we have to ask ourselves, which streaming service has the most sustainable business model and which service is struggling in today’s market? In my opinion, Spotify has the most sustainable streaming service business model and the market right now and I think this is due to the fact that you can curate/customize your music any way you like. Spotify also creates playlists which includes music that you are listening to as well as new music that you may have not listened to before. As mentioned earlier, Spotify’s subscriber base has increased to 40 million, “But that growth has attracted new competitors to the space, as digital giants Pandora, ¬iHeartRadio and Amazon all debut their own on-demand streaming services. Along with established offerings like Spotify, Apple Music and Google Play, not to mention YouTube, there will soon be nearly a dozen on-demand music-streaming services in the United States alone” (Rys). While competition is increasing, I still think that Spotify will continue to be the leading streaming service in 2017 “and its long-rumored IPO, expected to arrive around September. "Spotify's IPO will have a bigger impact at the ¬industry level than any other ¬company in any other major industry," says Mulligan” (Rys). Not only is this a benefit for Spotify, but it also means “labels, publishers, artists, and songwriters… will see an influx in capital” (Rys). The only negative aspect of Spotify’s business model is that “Spotify has yet to turn a profit, having lost nearly $200 million on $2.2 billion in revenue in 2015, the most recent public figures available. And the company's $1 billion round of convertible debt, raised in March 2016, will require hefty interest payments the longer the company stays private. Regardless, the increased scaling of subscribers and major revenue has to be an encouraging sign” (Gensler). Right behind Spotify is Apple music. “In the 18 months since the service was launched, the tech giant reveals that it has just crossed the 20 million paid subscribers mark. It last reported 17 million subscribers in September, marking a 15 percent jump in three months” (Halperin). I think this is due to the exclusive release of albums from Drake, Travis Scott, DJ Khaled, Future, and Frank Ocean. But, while this growth is extremely impressive, “We can’t forget that, as an industry, we still have very few music subscribers. There are billions of people listening to music and we haven’t even hit 100 million subscribers says Billboard’s Zane Low” (Halerpin). This means that there is even more room for growth. Based on the information provided above, it’s apparent that Spotify and Apple Music are leading the charge in 2017, but who is the struggling streaming service? Obviously it’s Pandora. I haven’t used Pandora in years because of the lack of customization provided and the amount of ads between songs, but to combat this, Pandora released there own streaming service. “Pandora's entry into the crowded world of
on-demand streaming begins this week with the launch of Pandora Premium. On Monday, the company said the previously announced service will roll out to Pandora Plus subscribers on Wednesday (March 15), with free tier and new users getting a chance to try in the coming weeks” (Billboard Staff). Now, while this is exciting news for Pandora and its users, the premium version of the streaming service, which will cost $9.99/month, which is more expensive than the $4.99 I am paying for Spotify premium as a student, “will be a mostly mobile-only service at first, with other platforms -- including the desktop -- rolling out in the coming months” (Billboard Staff). This is a terrible business model. Why wouldn’t you just release the premium service on all platforms at once?. In conclusion, I believe that Spotify and Apple Music will lead the music streaming industry for a while due to the ability to customize your music and the release of exclusive albums, and Pandora will fail due to it’s lack of accessibility of its brand new streaming service. Seriously, why wouldn’t you just make the service available on all platforms?
Works Cited Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 27 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Staff, Billboard. "Enter Pandora: New On-Demand Streaming Service Launches This Week." Billboard. N.p., 13 Mar. 2017. Web. 27 Mar. 2017.
Before there were subscriptions for streaming services, there was many easy ways to download music for free. The music industry and artists really started to suffer from the effect of mass music piracy. The internet was an easy and accessible tool to download music illegally. Because of sites like LimeWire, artists weren’t getting their fair cut of their music production. Artists were making hits but making less than expected. ITunes sales dipped as well as CD’s. After Taylor Swift pushed for Apple to give artists more of a pay cut. Apple, in response to Taylor Swift, agreed to give artist more pay from their music. In result, was the beginning of Apple Music subscription. Out of Streaming services, Apple Music and Spotify come in a close race for the best streaming service. As you compare the two, you realize it all comes down to preference and features for which platform you prefer. Spotify comes in the number 1 top spot with over 50 million subscribers. This bests Apple Music’s 20 million subscribers. Now when it comes down to it, you are using these platforms for the purpose of listening to music. Spotify has a 30 million song catalog; shorting Apple Music by 10 million songs. How does Spotify dominate with subscribers compared to Apple Music’s impressive 40 million song catalog? It’s simple; features and options. Spotify offers a Spotify Free and a Spotify premium, where you have to pay $9.99/month. The difference between these two versions are significant. Spotify Premium features include: play any song, download & listen to music offline, no advertisements, better sound quality and unlimited skips. All on top of that, you get to share playlists with your friends, giving you that live social interaction experience. As Spotify is leading the streaming services, Apple is chomping at their heels. Apple is putting pressure on Spotify to keep their top spot as Apple started receiving exclusive deals with A-List artists. As streaming services have become the new way to download and listen to music, Apple and Spotify have helped turn around the sales for the music industry the past two years. Though streaming music has become a new popular fad, there are platforms that need a little help with their music aspect of streaming. If you take a look at Amazon Prime they have a music streaming service with their Amazon Prime membership. While the benefit of the Amazon Prime membership is quite worth it other than music reason, their music catalog only contains about 1 million songs. Amazon definitely struggles on a music level when compared to Spotify and Apple music. If Amazon were to increase their song catalog, I bet they would give themselves a better shot to compete with the top 2 streaming services.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Staff, Digital Trends. "Spotify vs. Apple Music: Which Service Is the Streaming King?" Digital Trends. N.p., 07 Mar. 2017. Web. 28 Mar. 2017.
Streaming music is a major way that people listen to music. In 2016, “streaming overtook physical sales and became a dominant driver of revenues in the music industry” (Gensler). This helped grow the music increase, bringing in $1.61 billion. This has led to new platforms evolving, vying to get subscribers to stream through their platform. Pandora, iHeartRadio and Amazon all debuted on-demand streaming services in 2016 similar to the platform that Spotify has perfected. Out of all the streaming services, I think that Apple Music and Spotify have the most sustainable business model. I personally use Spotify but after reading the articles, Apple Music has made headway in the streaming industry. After launching in 2016, they so far have 20 million subscribers and are growing. They have a lot of opportunity to continue to grow and with the Apple brand behind them to attracts people instantly. A lot of people looked at iTunes when it first came out (and still do) as the go to place to get music. They always have exclusive deals and promotion you can only get on iTunes and they are doing the same thing with Apple Music. Chance the Rapper’s album was put out exclusively on Apple Music, which attracts people to use the service or even switch over to it.
ReplyDeleteSpotify has been the largest player in the music streaming world, they have over 50 million paid subscribers and offer different levels of service depending on the subscribers budget and lifestyle. Unlike Apple Music, they don’t have exclusive deals with artist, which can be both a good and bad thing. According to Troy Carter, global head of creator services for Spotify and CEO of Atom Factory says that “limiting access to music only incentives fans to seek it out on pirate sites or YouTube where it generates less revenue” (Levine). For services like Apple Music and Tidal, exclusive deals do not always work in their favor.
Tidal is the streaming service that seems to really be struggling to compete with top brands. Recently, Jay Z sold one-third stake in Tidal to Sprint. Tidal offers exclusive content to subscribers from artist like Rhianna, Beyoncé and Kayne West and is in most cases the only way to access this music without pirating. According to an article by the Boston Globe, Midia Research estimated that Tidal had only 1 million paying user, significantly lower than Spotify and Apple Music. Tidal deal with Sprint will hopefully give them a big boost to access more subscribers. I have not used Tidal but it seems to have specific audience that they reach out to and don’t have all that Spotify and Apple Music have to offer.
DeleteAmazon Music, Pandora and iHeartRadio are those in-between services that could really either succeed or fail. Amazon and Pandora have a huge fan base that will help them succeed. Pandora was the go to service because it offered custom radio, now they offer an on-demand service like Spotify so it will be interesting to see where this take the company.
Mills, Doug. “Tidal, Jay Z’s Streaming Service, Sells a Stake to Spring-The Boston Globe.” BostonGlobe.com. N.p., 23 Jan. 2017. Web. 23 Mar. 2017.
Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. N.p., 3 Mar. 2017. Web. 23 Mar 2017.
Levine, Robert. “Bad for the Industry: Spotify’s Artist Whisperer Troy Carter Slams Exclusives, Updates Company’s Subscriber Total.” Billboard. N.p., 25 Aug. 2017. Web. 23 Mar. 2017.
Olivia Dufault (1)
ReplyDeleteLast year, “2016 became the first time streaming overtook sales as the music industry’s dominant model and subscriber growth overall has consistently increased during the past few years” (Rys, 2017). The two dominant streaming services are Spotify and Apple Music, Spofity with 40 million subscribers and Apple Music with 20 million. Currently, “several analysts agree that the streaming landscape in 2017 will be dominated by Spotify and its long-rumored IPO” (Rys, 2017). It’s not surprising that Spotify is the most sustainable and successful streaming service because it is the most popular among subscribers. Spotify created the original on-demand system of streaming music, and more often than not, such as with Netflix, the original streaming service is most successful. However, “it should be noted that Spotify has yet to turn a profit, having lost nearly $200 million on $2.2 billion revenue in 2015 and the company’s $1 billion round of convertible debt, raised in March 2016, will require hefty interest payments the longer the company stays private” (Gensler, 2017). According to the article Bad for the Industry, Spotify is planning to go public in the second half of 2017 and is adding subscribers faster than ever, so the company need not worry too much about its profits (Levine, 2016). Spotify is currently the number 1 streaming service for music as it “increasingly exposes users to new music, provides marketing for artists and helps sell concert tickets” (Levine, 2016); it’s more than just a streaming service. Also lucky for Spotify, because it is so popular, many artists support this new way of streaming music and were ecstatic when the streaming service reached 50 million paying subscribers. Music artists such as Justin Timberlake, Demi Lovato, and more took to Twitter to congratulate Spotify; celebrities endorsing the streaming service without being “forced” to is another factor that makes Spotify so popular among listeners. People tend to gravitate toward things celebrities like.
Olivia Dufault (2)
DeleteStreaming services that are struggling are the smaller companies such as Tidal and Soundcloud because there are so many music-streaming options right now. “Along with established offerings like Spotify, Apple Music, and Google Play, not to mention Youtube, there will soon be nearly a dozen on-demand music streaming services in the United States alone” (Rys, 2017). Due to the fact there are so many options and most listeners “will never subscribe to more than one streaming service” (Levine, 2016), the smaller companies will most likely fall under consolidation, unless they can offer “more, or different, value than the market leaders already have” (Rys, 2017). When it comes to offering more for a cheaper price I think Pandora could end up giving Spotify a run for its money. “Pandora has already negotiated deals with labels to offer enhanced radio at $4.99 that includes offline listening and replay functions” (Rys, 2017), while it is also coming out with a Premium option “with access to 40-million songs on-demand plus offline listening and curated playlists from the company’s editorial team” (Billboard). Pandora is already a very popular radio app with tens of millions of subscribers, so by creating a Premium option that is very similar to Spotify the streaming system only becomes more marketable. “With Premium, Pandora is leveraging their immense trove of data and everything they’ve learned about personalization to offer a listening experience that sets a new standard for what a music service should be” (Billboard).
Works Cited
Billboard Staff. “Enter Pandora – New On-Demand Streaming Service Launches This Week.” Billboard. N.p., 13 Mar. 2017. Web. 26 Mar. 2017.
Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. N.p., 3 Mar. 2017. Web. 26 Mar 2017.
Levine, Robert. “Bad for the Industry: Spotify’s Artist Whisperer Troy Carter Slams Exclusives, Updates Company’s Subscriber Total.” Billboard. N.p., 25 Aug. 2017. Web. 26 Mar. 2017.
Rys, Dan. “2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. N.p., 6 Jan. 2017. Web. 26 Mar. 2017.
It should come as no surprise as to which streaming services have the most sustainable business models. Numbers don’t lie and it shows because Spotify and Apple Music rightfully boast of having 40 million and 20 million paid subscribers (Rys). It is interesting to note, however, that the two streaming services go about their business models in two different ways. According to cnet.com, Spotify is the only service that allows the user to stream free, on-demand tunes with advertising (Solsman). This draws the attention of users, much like myself, who continually refuse to pay for music and will sit through an ad to do so. Apple Music plays a much different game and utilizes exclusive deals with top name artists to draw those users in who need to listen to an album immediately upon its release. Some of the big name artists include, “Drake, Future, Frank Ocean, DJ Khaled and Travis Scott” (Halperin). There has been worry since Spotify has yet to turn a profit, having lost nearly $200 million on $2.2 billion in revenue in 2015 (Gensler). I do not think there should be any worry seeing as the now very profitable Netflix did not turn a profit before its IPO in 2002, I can see Spotify easily following suit once they go public, which is speculated to be around September (Rys).
ReplyDeleteKronenberger cont.
DeleteThe music streaming service that I believe is struggling the most at the moment is SoundCloud. It’s a shame to because they have a user base of around 175 million listeners, however, the company lost around 52 million in 2015 with no sight of turning a profit (Liptak). SoundCloud is a niche music service, many users upload and mix their own content, something that you do not see on the larger services like Spotify and Apple Music. SoundCloud does offer a premium service with the price tag of $10 to upgrade to SoundCloud Go+, which includes access to over 150M tracks, no ads and offline listening, but these few perks do not seem very enticing when Spotify and Apple Music have a much larger libraries of popular artists with an overall better streaming experience for only $5 a month in Spotify’s case.
Works Cited
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 27 Mar. 2017.
Joan E. Solsman September 9, 2016 5:00 AM PDT. "Apple Music vs. Spotify: Guess Who's Winning Now." CNET. N.p., 09 Sept. 2016. Web. 27 Mar. 2017.
Liptak, Andrew. "SoundCloud Is Losing a Lot of Money - Is an Acquisition Coming Soon?" The Verge. The Verge, 08 Jan. 2017. Web. 27 Mar. 2017.
"Purchase a Consumer Subscription." SoundCloud. N.p., n.d. Web. 27 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Recently there has been a surge in the popularity of music streaming. Streaming services like Spotify, Pandora, Apple Music, and Amazon were the major game changers in the industry. The streaming service that has the most sustainable business model would have to be Spotify. “Spotify, the world’s largest music subscription service, today announced a major milestone: 50 million paid subscribers,” making them the top subscribed streaming service (Gensler). Clearly, whatever they are doing is working out in their favor. Their subscribership is rapidly growing. “Streaming subscriber growth has also consistently increased over the past few years: in 2016; Spotify and Apple Music together added more than 20 million subscribers, boosting their announced numbers to 40 million and 20 million, respectively,” growth like this was amazing to see and truly proves that Spotify, with over 40 million subscribers, is a force to be reckoned with (Gensler). “I don’t know if catching Spotify needs to be the goal, but I think making Apple music stronger is,” according to one of the managing partners at Music Watch (Rys). Other streaming services are trying to mimic Spotify’s business model since it has proven to be a success. “It (Spotify) increasingly exposes users to new music, provides marketing for artists and helps sell concert tickets” (Levine). Spotify is not only helping its users create custom playlists, but they are also helping the artists get their name out there and promote their upcoming tours.
ReplyDelete(Sicbaldi Continued)
DeleteOne streaming service, on the other hand, is struggling. In my opinion Pandora is that one. Pandora, in my opinion, has frequently been two steps behind when it comes to being a competitive streaming service. Pandora just introduced Pandora Premium which “will cost $9.99 a month, with access to 40 million songs on-demand plus offline listening and curated playlists from the company’s editorial team” (Staff). Similarly to the already successful Spotify version, Pandora Premium will be an ad free music platform. “Premium will be a mostly mobile-only service at first, with other platforms- including the desktop—rolling out in the coming months,” Pandora is already behind when it comes to premium content, and not being available on the desktop is only going to push them further behind (Staff). Their free version is so full of advertisements and commercials that at times you feel like you are hearing a lot more commercials than music. If Pandora wants to compete with the big names like Apple Music and Spotify, then they need to step up their business model and start doing services similar to Spotify since what they are doing is clearly not competitive enough to be a top competitor.
Works Cited
Gensle, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. Billboard, 2
Mar. 2017. Web. 27 Mar. 2017
Levine, Robert. "'Bad for the Industry': Spotify's Artist Whisperer Troy Carter Slams Exclusives,
Updates Company's Subscriber Total." Billboard. Billboard, 25 Aug. 2016. Web. 27 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard.
Billboard, 6 Jan. 2017. Web. 27 Mar. 2017.
Staff. "Enter Pandora: New On-Demand Streaming Service Launches This Week." Billboard.
Billboard, 13 Mar. 2017. Web. 27 Mar. 2017.
Most people are aware that streaming services are slowly taking over the music industry. 2016 became the first year in which streaming overtook sales as the music industry’s dominant platform. 51.3 percent of album consumption and downloads came from streaming services. In 2016, Spotify and Apple Music together both added more than 20 million subscribers and boosted their subscriber numbers to 40 million and 20 million, respectively. With the success of Spotify and Apple Music, this prompted other media companies to start their own streaming services, such as Pandora, IHeartRadio, and Amazon.
ReplyDeleteIn order to compete with Spotify and Apple Music, the streaming leaders, companies will have to think outside of the box and be able to offer more additional services in which Spotify and Apple Music do not. Surviving in the streaming industry may be hard to achieve but creating a company in which can be bought out, may be the goal for some streaming services. There are already rumors of Google Play and other companies bidding for SoundCloud and Tidal, and other streaming services.
The most sustainable business model will come down to a battle between Spotify and Apple Music. In 18 months since Apple Music was launched, they surpassed the 20 million subscribers mark. The months between September and December of 2016, there was a 15 percent jump in subscribers. 50 percent of Apple Music users live outside of the United States, which is good for the future of the media giant because they aren’t relying on strictly U.S. sales. Apple Music has been targeting the hip-hop genre specifically because they have noticed that the genre has been underrepresented on Apple Music. Targeting the hip-hop genre will also help in reaching the 18-24 demographic. Most people I know use Spotify, but if Apple Music starts to take hip-hop artists exclusively away from Spotify, then they might have a slight advantage in the future.
A few weeks ago, Spotify announced that they reached the 50 million paid subscribers mark. In September, Spotify was at 40 million subscribers, so that means in just five-and-a-half months, Spotify gained 10 million subscribers. Spotify’s numbers will continue to grow and the streaming giant leads the industry, and it is also possible that Spotify can go public with their IPO and generate more and more revenue. Spotify used to allow all music available to paying and non-paying customers but that will soon change. Spotify has agreed with multiple major record labels to restrict some of the biggest new releases to their premium members only. This can either hurt their future or add more subscribers, which I think is the more likely option. Spotify is currently the streaming leader in the industry and I don’t see that changing any time soon, I have been paying for Spotify for a few years now and I recently have tried Apple Music and cannot see myself making the change over.
Works Cited:
Rys, Dan. “2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 27 Mar. 2017.
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017.
Hern, Alex. "Spotify to restrict some music to paying subscribers only." The Guardian. Guardian News and Media, 17 Mar. 2017. Web. 27 Mar. 2017.
Last year, in 2016, “streaming overtook physical sales and became a dominant driver of revenues in the music industry” (Gensler). The popularity of streaming music is growing each day, and so are the choices of outlets we can go to listen. Amongst them all, the two most dominant is Apple Music and Spotify, with both streaming services growing consistently. In 2016, both Apple Music and Spotify added, “more than 20 million subscribers, boosting their announced numbers to 40 millions and 20 million.” (Rys) Personally, I use Spotify for their free service. I grind out and endure the 30 second adds to listen to Ed Sheeran free of cost. I feel that many people, even if they don’t like to admit it, also scheme this service for their escape debt free. Out of them both, I would say that Spotify has the most sustainable model, and several analysts agree with me stating that, “the streaming landscape in 2017 will be dominated by Spotify and its long-rumored IPO.” (Rys) Spotify is currently in debt. A lot of Debt. However, this does not worry the streaming giants because, as mentioned, they plan to go public in the second half of 2017, which will quickly turn a profit with their already established services. (Levine). A streaming service that I would consider struggle would be SoundCloud. As with the popularity of streaming, more and more services are being created.
ReplyDeleteConsidering that listeners “will never subscribe to more than one streaming service (Levine), and with Apple Music and Spotify sharing roughly 60 million subscribers, it is going to be difficult for anyone else to share the success. In the article, Streaming Wars, Rys adds that companies smaller than Apple Music and Spotify must provide “more, or different, value than the market leaders already have.” (Rys) Unfortunately, the only added value that SoundCloud provides is the price, currently charging $9.99. As a company competing for subscribers, it is hard to fathom why SoundCloud would price their service so high. Later in 2017, and 2018, I believe that you will see less streaming services. With streaming music so popular right now, many new services are coming to the surface, however there is a question how sustainable they are, and how long they will last. I believe that many companies will either go out of business or some of the big boys like Apple Music, Spotify and Pandora may decide to eat them up and acquire.
DeleteCited.
DeleteGensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. N.p., 3 Mar. 2017. Web. 22 Mar 2017.
"How Music Marketing Is Changing In 2017." Hypebot. N.p., 2017. Web. 27 Mar. 2017.
Levine, Robert. “Bad for the Industry: Spotify’s Artist Whisperer Troy Carter Slams Exclusives, Updates Company’s Subscriber Total. “Billboard. N.p., 25 Aug 2017. Web 23 Mar. 2017.
Rys, Dan. “2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?” Billboard. N.p., 6 Jan 2017. Web. 27 Mar. 2017.
We all know that streaming music is the future of the industry, and according to Nielsen, “In a year full of milestones, 2016 became the first time ¬streaming overtook sales as the music industry's dominant model, accounting for 51.3 percent of album consumption and besting physical and downloads combined” (Rys). Additionally, “subscriber growth overall has consistently increased ¬during the past few years; in 2016, Spotify and Apple Music together added more than 20 million ¬subscribers, -boosting their ¬numbers to 40 ¬million and 20 ¬million, respectively (Rys). But we have to ask ourselves, which streaming service has the most sustainable business model and which service is struggling in today’s market? In my opinion, Spotify has the most sustainable streaming service business model and the market right now and I think this is due to the fact that you can curate/customize your music any way you like. Spotify also creates playlists which includes music that you are listening to as well as new music that you may have not listened to before. As mentioned earlier, Spotify’s subscriber base has increased to 40 million, “But that growth has attracted new competitors to the space, as digital giants Pandora, ¬iHeartRadio and Amazon all debut their own on-demand streaming services. Along with established offerings like Spotify, Apple Music and Google Play, not to mention YouTube, there will soon be nearly a dozen on-demand music-streaming services in the United States alone” (Rys). While competition is increasing, I still think that Spotify will continue to be the leading streaming service in 2017 “and its long-rumored IPO, expected to arrive around September. "Spotify's IPO will have a bigger impact at the ¬industry level than any other ¬company in any other major industry," says Mulligan” (Rys). Not only is this a benefit for Spotify, but it also means “labels, publishers, artists, and songwriters… will see an influx in capital” (Rys). The only negative aspect of Spotify’s business model is that “Spotify has yet to turn a profit, having lost nearly $200 million on $2.2 billion in revenue in 2015, the most recent public figures available. And the company's $1 billion round of convertible debt, raised in March 2016, will require hefty interest payments the longer the company stays private. Regardless, the increased scaling of subscribers and major revenue has to be an encouraging sign” (Gensler).
ReplyDeleteRight behind Spotify is Apple music. “In the 18 months since the service was launched, the tech giant reveals that it has just crossed the 20 million paid subscribers mark. It last reported 17 million subscribers in September, marking a 15 percent jump in three months” (Halperin). I think this is due to the exclusive release of albums from Drake, Travis Scott, DJ Khaled, Future, and Frank Ocean. But, while this growth is extremely impressive, “We can’t forget that, as an industry, we still have very few music subscribers. There are billions of people listening to music and we haven’t even hit 100 million subscribers says Billboard’s Zane Low” (Halerpin). This means that there is even more room for growth. Based on the information provided above, it’s apparent that Spotify and Apple Music are leading the charge in 2017, but who is the struggling streaming service? Obviously it’s Pandora. I haven’t used Pandora in years because of the lack of customization provided and the amount of ads between songs, but to combat this, Pandora released there own streaming service. “Pandora's entry into the crowded world of
on-demand streaming begins this week with the launch of Pandora Premium. On Monday, the company said the previously announced service will roll out to Pandora Plus subscribers on Wednesday (March 15), with free tier and new users getting a chance to try in the coming weeks” (Billboard Staff). Now, while this is exciting news for Pandora and its users, the premium version of the streaming service, which will cost $9.99/month, which is more expensive than the $4.99 I am paying for Spotify premium as a student, “will be a mostly mobile-only service at first, with other platforms -- including the desktop -- rolling out in the coming months” (Billboard Staff). This is a terrible business model. Why wouldn’t you just release the premium service on all platforms at once?. In conclusion, I believe that Spotify and Apple Music will lead the music streaming industry for a while due to the ability to customize your music and the release of exclusive albums, and Pandora will fail due to it’s lack of accessibility of its brand new streaming service. Seriously, why wouldn’t you just make the service available on all platforms?
ReplyDeleteWorks Cited
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 27 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Staff, Billboard. "Enter Pandora: New On-Demand Streaming Service Launches This Week." Billboard. N.p., 13 Mar. 2017. Web. 27 Mar. 2017.
Before there were subscriptions for streaming services, there was many easy ways to download music for free. The music industry and artists really started to suffer from the effect of mass music piracy. The internet was an easy and accessible tool to download music illegally. Because of sites like LimeWire, artists weren’t getting their fair cut of their music production. Artists were making hits but making less than expected. ITunes sales dipped as well as CD’s. After Taylor Swift pushed for Apple to give artists more of a pay cut. Apple, in response to Taylor Swift, agreed to give artist more pay from their music. In result, was the beginning of Apple Music subscription.
ReplyDeleteOut of Streaming services, Apple Music and Spotify come in a close race for the best streaming service. As you compare the two, you realize it all comes down to preference and features for which platform you prefer. Spotify comes in the number 1 top spot with over 50 million subscribers. This bests Apple Music’s 20 million subscribers. Now when it comes down to it, you are using these platforms for the purpose of listening to music. Spotify has a 30 million song catalog; shorting Apple Music by 10 million songs. How does Spotify dominate with subscribers compared to Apple Music’s impressive 40 million song catalog? It’s simple; features and options. Spotify offers a Spotify Free and a Spotify premium, where you have to pay $9.99/month. The difference between these two versions are significant. Spotify Premium features include: play any song, download & listen to music offline, no advertisements, better sound quality and unlimited skips. All on top of that, you get to share playlists with your friends, giving you that live social interaction experience. As Spotify is leading the streaming services, Apple is chomping at their heels. Apple is putting pressure on Spotify to keep their top spot as Apple started receiving exclusive deals with A-List artists.
As streaming services have become the new way to download and listen to music, Apple and Spotify have helped turn around the sales for the music industry the past two years. Though streaming music has become a new popular fad, there are platforms that need a little help with their music aspect of streaming. If you take a look at Amazon Prime they have a music streaming service with their Amazon Prime membership. While the benefit of the Amazon Prime membership is quite worth it other than music reason, their music catalog only contains about 1 million songs. Amazon definitely struggles on a music level when compared to Spotify and Apple music. If Amazon were to increase their song catalog, I bet they would give themselves a better shot to compete with the top 2 streaming services.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Staff, Digital Trends. "Spotify vs. Apple Music: Which Service Is the Streaming King?" Digital Trends. N.p., 07 Mar. 2017. Web. 28 Mar. 2017.